MANILA — The 5.7 percent inflation uptick in July did not catch government by surprise as it was still within the forecasted range, an official of the Department of Finance said on Wednesday.
“It was expected — the Bangko Sentral ng Pilipinas issued a forecast up to 5.8. So it was within their forecast,” DOF Assistant Secretary Tony Lambino said during the weekly Palace economic press briefing.
He said the 5.7 percent is a year-on-year comparison, “which means we paid in July 2018 for a basket of goods versus that same basket of goods in July 2017”.
“So if we pay X amount, it’s 5.7 percent higher than the year after. For every PHP100, that’s five pesos and seventy centavos more,” Lambino explained.
Lambino said the month-on-month inflation was only 0.5 percent as explained by the Philippine Statistics Authority (PSA).
On per region inflation rate movement, Lambino said regions that have productive agriculture sector have the lowest inflation like Region 3 (Central Luzon), which registered the lowest inflation of 2.7 percent.
“What does this mean to us? This means that a productive rice sector and agriculture in general, is key to bringing inflation down,” Lambino said.
“And therefore, again, the economic team has made the call to pass the rice tariffication bill as an urgent measure,” he added.
President Rodrigo Duterte has certified the bill as urgent and was actually passed by the House of Representatives on second reading on Tuesday (August 7).
“So we want to keep the moment on that because as the Bangko Sentral has estimated, this will not only lower the price of rice in our markets, it will also lower the inflation rate and it will provide us, based on the latest version of the bill, a PHP10-billion enhancement fund that we will use to increase the productivity of our farmers,” Lambino said.
Lambino said the inflation rate is projected to go down towards the end of the year.
“That is, in fact, the projection of the whole economic team, that inflation rate will start down trending toward the end of the year,” he said.
He said the Department of Budget Coordination Committee (DBCC) has estimated the inflation for the year to be between 4 to 4.5 percent.
“We are now at 4.5 percent year to date. But if there is a tapering off, then we will be well within that estimate. More importantly, the economic team is confident that we will be within BSP target in 2019,” he said.